§1892. Payment and adjustment of claims, policies other than life and health and accident;
personal vehicle damage claims; extension of time to respond to claims during
emergency or disaster; penalties; arson-related claims suspension

A.(1) All insurers issuing any type of contract, other than those specified in R.S.
22:1811, 1821, and Chapter 10 of Title 23 of the Louisiana Revised Statutes of 1950, shall
pay the amount of any claim due any insured within thirty days after receipt of satisfactory
proofs of loss from the insured or any party in interest. The insurer shall notify the insurance
producer of record of all such payments for property damage claims made in accordance with
this Paragraph.

(2) All insurers issuing any type of contract, other than those specified in R.S.
22:1811, R.S. 22:1821, and Chapter 10 of Title 23 of the Louisiana Revised Statutes of 1950,
shall pay the amount of any third party property damage claim and of any reasonable medical
expenses claim due any bona fide third party claimant within thirty days after written
agreement of settlement of the claim from any third party claimant.

(3) Except in the case of catastrophic loss, the insurer shall initiate loss adjustment
of a property damage claim and of a claim for reasonable medical expenses within fourteen
days after notification of loss by the claimant. In the case of catastrophic loss, the insurer
shall initiate loss adjustment of a property damage claim within thirty days after notification
of loss by the claimant except that the commissioner may promulgate a rule for extending
the time period for initiating a loss adjustment for damages arising from a presidentially
declared emergency or disaster or a gubernatorially declared emergency or disaster up to an
additional thirty days. Thereafter, only one additional extension of the period of time for
initiating a loss adjustment may be allowed and must be approved by the Senate Committee
on Insurance and the House Committee on Insurance, voting separately. Failure to comply
with the provisions of this Paragraph shall subject the insurer to the penalties provided in
R.S. 22:1973.

(4) All insurers shall make a written offer to settle any property damage claim,
including a third-party claim, within thirty days after receipt of satisfactory proofs of loss of
that claim.

B.(1) Failure to make such payment within thirty days after receipt of such
satisfactory written proofs and demand therefor or failure to make a written offer to settle any
property damage claim, including a third-party claim, within thirty days after receipt of
satisfactory proofs of loss of that claim, as provided in Paragraphs (A)(1) and (4) of this
Section, respectively, or failure to make such payment within thirty days after written
agreement or settlement as provided in Paragraph (A)(2) of this Section when such failure
is found to be arbitrary, capricious, or without probable cause, shall subject the insurer to a
penalty, in addition to the amount of the loss, of fifty percent damages on the amount found
to be due from the insurer to the insured, or one thousand dollars, whichever is greater,
payable to the insured, or to any of said employees, or in the event a partial payment or
tender has been made, fifty percent of the difference between the amount paid or tendered
and the amount found to be due as well as reasonable attorney fees and costs. Such penalties,
if awarded, shall not be used by the insurer in computing either past or prospective loss
experience for the purpose of setting rates or making rate filings.

(2) The period set herein for payment of losses resulting from fire and the penalty
provisions for nonpayment within the period shall not apply where the loss from fire was
arson related and the state fire marshal or other state or local investigative bodies have the
loss under active arson investigation. The provisions relative to time of payment and
penalties shall commence to run upon certification of the investigating authority that there
is no evidence of arson or that there is insufficient evidence to warrant further proceedings.

(3) The provisions relative to suspension of payment due to arson shall not apply to
a bona fide lender which holds a valid recorded mortgage on the property in question.

(4) Whenever a property damage claim is on a personal vehicle owned by the third
party claimant and as a direct consequence of the inactions of the insurer and the third party
claimant's loss the third party claimant is deprived of use of the personal vehicle for more
than five working days, excluding Saturdays, Sundays, and holidays, the insurer responsible
for payment of the claim shall pay, to the extent legally responsible, for reasonable expenses
incurred by the third party claimant in obtaining alternative transportation for the entire
period of time during which the third party claimant is without the use of his personal
vehicle. Failure to make such payment within thirty days after receipt of adequate written
proof and demand therefor, when such failure is found to be arbitrary, capricious, or without
probable cause shall subject the insurer to, in addition to the amount of such reasonable
expenses incurred, a reasonable penalty not to exceed ten percent of such reasonable
expenses or one thousand dollars whichever is greater together with reasonable attorneys fees
for the collection of such expenses.

(5) When an insurance policy provides for the adjustment and settlement of first-party motor vehicle total losses on the basis of actual cash value or replacement with another
of like kind and quality, and the insurer elects a cash settlement based on the actual cost to
purchase a comparable motor vehicle, such costs shall be derived by using one of the
following:

(a) A fair market value survey conducted using qualified retail automobile dealers
in the local market area as resources. If there are no dealers in the local market area, the
nearest reasonable market can be used.

(b) The retail cost as determined from a generally recognized used motor vehicle
industry source; such as, an electronic database, if the valuation documents generated by the
database are provided to the first-party claimant, or a guidebook that is available to the
general public. If the insured demonstrates, by presenting two independent appraisals, based
on measurable and discernable factors, including the vehicle's preloss condition, that the
vehicle would have a higher cash value in the local market area than the value reflected in
the source's database or the guidebook, the local market value shall be used in determining
the actual cash value.

(c) A qualified expert appraiser selected and agreed upon by the insured and insurer.
The appraiser shall produce a written nonbinding appraisal establishing the actual cash value
of the vehicle's preloss condition.

(d) For the purposes of this Paragraph, local market area shall mean a reasonable
distance surrounding the area where a motor vehicle is principally garaged, or the usual
location of the vehicle covered by the policy.

C.(1) All claims brought by insureds, workers' compensation claimants, or third
parties against an insurer shall be paid by check or draft of the insurer or, if offered by the
insurer and the claimant requests, electronic transfer of funds to the order of the claimant to
whom payment of the claim is due pursuant to the policy provisions, or his attorney, or upon
direction of the claimant to one specified; however, the check or draft shall be made jointly
to the claimant and the employer when the employer has advanced the claims payment to the
claimant. The check or draft shall be paid jointly until the amount of the advanced claims
payment has been recovered by the employer.

(2) No insurer shall intentionally or unreasonably delay, for more than three calendar
days, exclusive of Saturdays, Sundays, and legal holidays, after presentation for collection,
the processing of any properly executed and endorsed check or draft issued in settlement of
an insurance claim.

(3) Any insurer violating this Subsection shall pay the insured or claimant a penalty
of two hundred dollars or fifteen percent of the face amount of the check or draft, whichever
is greater.

D.(1) When making a payment incident to a claim, no insurer shall require repairs
be made to a motor vehicle, including window glass repairs or replacement, in a particular
place or shop or by a particular entity.

(2) An insurer shall not recommend the use of a particular motor vehicle service or
network of repair services without informing the insured or claimant that the insured or
claimant is under no obligation to use the recommended repair service or network of repair
services.

(3) An insurer shall not engage in any act or practice of intimidation, coercion, or
threat to use a specified place of business for repair and replacement services.

(4) The commissioner may levy the following fines against any insurer that violates
this Subsection:

(a) For a first offense, one thousand dollars.

(b) For a second offense within a twelve-month period, two thousand five hundred
dollars.

(c) For a third or subsequent offense within a twelve-month period, five thousand
dollars.

(5) A violation of this Subsection shall constitute an additional ground, under R.S.
22:1554, for the commissioner to refuse to issue a license or to suspend or revoke a license
issued to any producer to sell insurance in this state.